managemnet company strategy managemanet Don’t Learn the Wrong Lessons from Failure

Don’t Learn the Wrong Lessons from Failure

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Past experience can provide invaluable insight into future results — but only if used effectively. In this piece, the authors discuss three common traps that leaders fall into when trying to learn from failures: They invest in strategies that don’t help, they don’t look at strategies that do helpful, and they don’t notice when such good results are driven. by bad processes. To avoid these pitfalls, the authors suggest that decision makers should analyze successes and failures together, and work to identify the characteristics and processes that truly differentiate the two.

Whether you’re running a small startup or a Fortune 500 corporation, the ability and willingness to learn from failure is most important for future success. And yet, focusing too much on understanding past failures can inadvertently reinforce mistakes, creating the illusion of learning instead of enabling real progress. So what does it take to glean accurate, actionable insights from a post-mortem?

Building ours previous job in exploring the obstacles associated with learning from experience, we identified three common traps that leaders fall into when analyzing failures. Below, we examine these challenges, and offer strategies to help decision makers avoid these pitfalls and move forward with confidence.

Trap 1: We invest in strategies that don’t help

When something goes wrong, it’s natural to focus on analyzing the failure in an attempt to understand and address its causes. However, if we only look for patterns among failures, we can identify characteristics common not only to failures, but also to successes, which will lead us to implement mitigation strategies that will never help.

For example, imagine you are a sales manager looking to improve the performance of your team. Most of your salespeople consistently hit their quotas, but 25% don’t. To find out why 25% of your team is struggling, you do a deep dive into their workflows, and you notice that most of these employees aren’t using the integrated note-taking tool in your contact management system. You conclude that the failure to use this tool is a cause of the performance issue, and therefore you invest in strategies such as technical training and monitoring methods to encourage employees to use the system properly.

It seems reasonable. But what if it turns out that most of the 75% of employees who successfully reach their quotas aren’t using the note-taking tool either? Without analyzing the successes alongside the failures, you won’t know that it’s a behavior common to both – and if that’s the case, then expensive interventions probably won’t solve the problem.

Trap 2: We forget strategies that help

Beyond giving the illusion of a data-driven understanding of the causes of failure, focusing only on analyzing negative results can also cause us to miss strategies that can help improve future performance. This can happen in two ways: In some cases, there may be characteristics common to successes that are not present in failures, while in other cases, characteristics that are present in only a few failures may be absent. in most of the achievements. In both situations, analyzing only the commonalities of failures prevents managers from recognizing important differences between failures and successes, leading them to ignore improvements that are actually will increase the chances of success.

Returning to our first example, perhaps an analysis of successful salespeople will reveal that they all start preparing for important sales calls a week in advance, while unsuccessful salespeople leave it until at the last minute. Early preparation may not be part of the usual sales process, and therefore analyzing non-performers alone is unlikely to identify their preparation routines as a significant issue. But a comparison between successful and unsuccessful cases would suggest that investing in time management tools or planning meetings can have an impact.

Similarly, it may happen that some poor performers actively participate in monthly review meetings and others do not, but almost all high performers do. If such behavior is not required, it may also go unnoticed, especially since “lack of active participation” is not a characteristic shared by many who do nothing. But a comparative analysis of the ways in which effective salespeople go the extra mile will identify that a dynamic exchange of information during review meetings tends to be associated with a higher rate of success, and so strategies that encourage active participation may help at least some. improve their performance.

Trap 3: We fail to notice when seemingly good results are driven by bad processes

Finally, perhaps the most dangerous trap we can fall into when we learn so much from failures is that we fail to notice the ways in which our current, seemingly effective processes can actually increase the risk of future failures. This is because good results are not necessarily born from good processes: They can be based on excessive risks or bad behavior that produces short-term gains at long-term costs. One need only look at well-publicized examples of apparent successes such as Enron or Theranos to see the damage hidden in problematic processes that can be devastating. If we only focus on reducing failures without understanding what really drives our successes, we will likely eventually discover that at least some of our achievements are real disasters in disguise.

If we go back to our sales team again, it might be the case, for example, that the salespeople who seem to be the most successful are actually inflating their numbers or sabotaging their peers. Analyzing low performers alone will fail to discover these issues, and it can take a long time for the fallout from these fraudulent, problematic practices to have enough negative business impact for anyone to notice. As such, management can benefit by looking not only at why unsuccessful employees seem to be struggling, but also why successful ones seem to be succeeding – and taking steps to address the poor ones. process behind any outcome.

Effective decision makers learn from failures and successes

Surely, the solution is to ignore failures. Trying to learn from the successes alone comes along similar traps. Instead, to avoid investing in strategies that don’t really make a difference and to identify the characteristics and processes that truly distinguish good results from bad ones, managers need to analyze the factors that drive them. in both.

It begins with clearly defining what failure and success mean in a given context, in relation to visible outcomes and the sometimes hidden processes that drive those outcomes. Then, based on these working definitions, managers can identify small but representative samples of failures and successes, and look for differences between the two – not just patterns within one group or another. Finally, this analysis can be repeated from time to time to help decision makers understand how these differences have evolved over time and adapt their strategies.

Beyond its greater reliability, this method has many additional benefits: From an investment point of view, instead of trying a large number of strategies that focus on different characteristics shared by failures, it is more efficient to test strategies that primarily focus on the differences between successes and failures. In addition, awareness of the similarity between success and failure can inform your level of confidence that a given intervention will be effective: The more characteristics they share, the less likely that a simple strategy will achieve the desired results. Furthermore, when everyone knows that the factors driving successes and failures are constantly being re-evaluated, decision makers are less likely to make risky or bad choices for short-term gain. , which will ultimately reduce the chances of future disaster.

Past experience can provide invaluable insight into future results — but only if used effectively. In our book The Myth of Experience, we extend the ideas above to explore different situations where intuitive, widespread methods of learning from experience unexpectedly reinforce biases, rather than aiding decision making. Ultimately, the best teacher is neither failure nor success in isolation: Wisdom comes from thoughtful consideration of the two together.

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